The euro fell a full cent against the dollar and government borrowing
costs dropped on Thursday, after the European Central Bank vowed not to
raise euro zone interest rates before the middle of next year.
The bank said it was pulling the plug on its 2.55 trillion euro
stimulus program but after the Federal Reserve raised U.S. interest
rates for the second time this year on Wednesday the ECB rate promise
came as a relief.
The pan-European STOXX 600 index raced back into positive territory after a morning in the red, though basic resources stocks stayed down more than 1 percent .SXPP after weak data from big metals consumer China.
Germany's DAX .GDAXI and France's CAC40 .FCHI led the stocks rebound, while the euro tumbled back toward $1.17 from well over $1.18 EUR=EBS [/FRX]. Euro zone government borrowing costs slid too as traders recalibrated prices for a longer period of sub-zero ECB rates.
Germany’s Bunds were offering 0.46 percent compared with 0.49 percent DE10YT=RR before the ECB statement.
U.S. Treasuries meanwhile were down to 2.94 percent US10YT=RR having briefly topped 3 percent overnight after the Federal Reserve had pushed up its interest rates.
The ECB had probably been too slow to reduce stimulus, Samra added, though recent weaker data showed Europe still had underlying issues.
The bank’s chief Mario Draghi holds a news conference at 1230 GMT to explain the decision.
His biggest complication is the increasingly murky economic European outlook, a developing trade war with the United States, a populist challenge from Italy’s new government and softening export demand.
The pan-European STOXX 600 index raced back into positive territory after a morning in the red, though basic resources stocks stayed down more than 1 percent .SXPP after weak data from big metals consumer China.
Germany's DAX .GDAXI and France's CAC40 .FCHI led the stocks rebound, while the euro tumbled back toward $1.17 from well over $1.18 EUR=EBS [/FRX]. Euro zone government borrowing costs slid too as traders recalibrated prices for a longer period of sub-zero ECB rates.
Germany’s Bunds were offering 0.46 percent compared with 0.49 percent DE10YT=RR before the ECB statement.
U.S. Treasuries meanwhile were down to 2.94 percent US10YT=RR having briefly topped 3 percent overnight after the Federal Reserve had pushed up its interest rates.
The ECB had probably been too slow to reduce stimulus, Samra added, though recent weaker data showed Europe still had underlying issues.
The bank’s chief Mario Draghi holds a news conference at 1230 GMT to explain the decision.
His biggest complication is the increasingly murky economic European outlook, a developing trade war with the United States, a populist challenge from Italy’s new government and softening export demand.
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